ABSTRACT
In the previous chapter, we discussed the aggregate planning problem of setting workforce and other resource requirements for the medium term. Now, we turn to the shorter-term problem of determining and meeting requirements for all parts and components that are assembled into each final product. Here, the overriding concern is with the coordination of materials at the various stages of the production process. The concept of dependent demand, introduced in the multiechelon context of Chapter 11, is vital in this chapter as well. Demand for components and raw materials is, to a large extent, determined when production schedules are established for parent items in which these materials are used. For example, in automobile assembly the requirements of a certain type of engine are known accurately when the assembly schedules of automobiles, in which the engine is used, are specified. The concepts discussed in this chapter are most applicable in situations where there are many stages of production and many parts and components that must be coordinated. It should become clear as the material requirements planning (MRP) system is described that it would not be useful in a continuous flow process industry or in a job shop. We shall see why in Section 15.7.
